Huge 4G expansion: Telstra to double coverage

news The nation’s largest telco Telstra has responded to the threat of expanded 4G networks from Optus and Vodafone by pledging to almost double its number of mobile towers with 4G support by the end of the year, as the race to cover the country with the latest mobile broadband infrastructure steps up a notch.

Telstra first officially switched on its 4G network in September 2011. Since then the telco has continually progressed the rollout of the network to thousands of locations around Australia, accumulating a massive 4G customer base running to several million along the way. Optus was slower off the mark, launching 4G services in mid-2012; but the SingTel subsidiary has done much to catch up with Telstra and has accumulated close to a million 4G customers.

In contrast, Vodafone has lagged behind as the telco deals with the still-dire fallout of the series of network outages and customer service woes it has suffered over the past few years, known collectively as ‘Vodafail’. The telco has focused on bringing its existing 3G infrastructure up to speed rather than on the next generation of 4G speeds. However, in mid-June Vodafone finally launched its 4G network in certain locations around Australia, stating that its network could deliver speed enhancements over Telstra and Optus, as the telco had access to certain wireless ‘contiguous’ spectrum blocks in some areas.

Telstra has since complained that Vodafone’s claims about having the fastest network are inaccurate, and this afternoon told journalists that it was about to make another huge investment in its 4G network to keep ahead of its rivals.

In a statement, the telco said it would 4G coverage to a further 200 regional towns across Australia in the next six months, including towns such as Batemans Bay (NSW), Colac (VIC), Biloela (QLD), Berri (SA), Margaret River (WA) and Latrobe (TAS).

Telstra Chief Operations Officer, Brendon Riley said the roll out program would take Telstra’s 4G coverage to 85 per cent of the population by Christmas this year, up from 66 per cent at the end of June. “Each week, large numbers of customers are choosing a Telstra 4G mobile device to enjoy the superfast speeds that our network offers. We want to make that experience available to even more customers in more places across Australia,” Riley said.

“Last August, we committed to extending our 4G coverage to 66 per cent of Australians by June 30. Having met that target, we are now committing to have superfast services in place for 85 per cent of the population by the end of the year by upgrading another 1500 base stations before Christmas. We already offer 4G services in approximately 100 regional locations and this new expansion will take 4G services to more than 200 new towns and increase our capital city footprint across many more suburbs.

As at June 30, Telstra had made 4G services available to 66 per cent of the Australian population and had deployed more than 2000 4G base stations, making services available in every capital city and many surrounding metropolitan suburbs, and more than 100 Australian regional areas.

Today it also stated that it now had 20MHz of contiguous spectrum in the 1800MHz band in Brisbane, Adelaide and Perth and 15MHz in Sydney and Melbourne; theoretically bringing it up to speed with Vodafone in some areas. It has also launched more than 30 4G mobile phones, tablets and data devices. By Christmas this year, Telstra plans to make 4G available in more than 300 towns across Australia, including many popular holiday hotspots and deploy 4G equipment to more than 3500 base stations.

Telstra Mobile Executive Director Warwick Bray said: “We will continue to offer Australians the most extensive and technically advanced 4G coverage in this country. This is important as we continue to manage capacity in our network and build out wireless services for the future.”

opinion/analysis
There can be no better demonstration of how many fat sacks of cash money Telstra has sitting around than the recent battle the telco has been fighting with Optus and Vodafone with 4G. Optus announces a moderate expansion of its network? Telstra will hold a major press conference the next day to lay down another 500 4G towers or so. Vodafone barely limps across the line, and beats Telstra’s speeds a little with its superior wireless spectrum? Telstra will come out a few weeks later with an announcement to virtually double its 4G coverage — AND address the speed issue.

“Right now, when it comes to mobile, Telstra holds all the cards in Australia, and it is playing those cards for all it is worth; rapidly soaking up hundreds of thousands of customers, destroying Vodafone’s revenue stream wholesale, and holding Optus back with one hand while it’s raking in cash with the other. It has the best handsets, the best network, the most marketing clout, the best reputation for network quality and a colossal lead in 4G infrastructure.

Now, from a customer viewpoint, there is no doubt this is fantastic — for now. Telstra is bending over to make customers like myself happy, and I’m happy to admit I’m a Telstra mobile customer. There is simply no point for someone like myself (who needs access to the Internet pretty much 24×7, anywhere I am), to sign up with Vodafone or Optus, when I know I’m going to get reduced coverage and speed from the alternative networks for only a slightly cheaper cost. And Telstra has been the only mobile carrier I recommend to anyone who asks for years now.

But long-term, what Telstra is doing right now represents a troubling sign for Australia’s mobile industry. Just as it did in fixed broadband, Telstra is now winding back competition in the mobile telecommunications space. One really has to wonder how long multinationals like SingTel and Vodafone will continue to be committed to piling hundreds of millions of dollars into mobile phone infrastructure in Australia, when it is clear they are only going to see very moderate levels of growth in return — and are even going to have to struggle to keep what customers they have. And who will keep Telstra honest with strong competitive offerings, when the company gets too far ahead for its own good?”

With its massive cash investments in 4G infrastructure, Telstra is re-monopolising Australia’s mobile space at the moment. Vodafone chief executive Bill Morrow has hinted at it before, and I think it’ll happen eventually, that regulators such as the Australian Competition and Consumer Commission will step in. Telstra is simply able to massively out-spend Optus and Vodafone in this space right now, as today’s announcement demonstrates.

Vodafone barely limped across the line to get 4G services available in Australia. Telstra’s response was to instantly try and squash it like a bug through throwing buckets of cash at the issue. That’s not competition. That’s a cashed-up former monopolist telco trying to kill off rivals. Under David Thodey, Telstra has had a great public relations image. But underneath all the fatherly smiles, the evil old Telstra is still there. And the beast is rapidly growing in strength, to the point where its rivals cannot keep up.

26 COMMENTS

Them putting up 4G in Margaret River doesn’t surprise me, like most regional places here in Western Australia, go out of the big city areas and coverage from other networks is pretty much non-existent due to population.

Some places barely even have Telstra access, i know the town i live in “Capel”, we tried and tried for years to tell Telstra that our single 3G tower we had, which was a good 10kms outside of town was crap and could barely manage more than 2-3bars of reception, so they eventually decided to build a tower at the minesite which is about 2kms out of town (about 1km from me :)).

“Telstra is killing off mobile competition in Australia through massively outspending its rivals in mobile infrastructure.”

When Telstra does not spend money on infrastructure, it is criticized. When it does, it is criticized more.

“Optus announces a moderate expansion of its network? Telstra will hold a major press conference the next day to lay down another 500 4G towers or so. Vodafone barely limps across the line, and beats Telstra’s speeds a little with its superior wireless spectrum? Telstra will come out a few weeks later with an announcement to virtually double its 4G coverage — AND address the speed issue.”

Do you think Telstra can instantly roll out 500 towers or do you think that maybe they were quietly getting on with the job of planning and building all those towers and simply made the announcement when the timing was right?

“Optus was slower off the mark, launching 4G services in mid-2012; but the SingTel subsidiary has done much to catch up with Telstra and has accumulated close to a million 4G customers.”

That was because Optus demanded wholesale access to Telstra’s LTE at the same interconnect rates as the fixed network and only considered an LTE roll-out of it’s own when the ACCC rejected it, partly because at the time, Optus actually had more of the mobile market than Telstra.

Optus is fully owned by Singtel, a government backed Telco.
“SingTel, is a Singaporean telecommunications company, with a combined mobile subscriber base of 416 million customers from its own operations and regional associates in 25 countries at end of June 2011 increased by 19 percent from a year ago, making it one of the largest mobile network operators in the Singapore and the 20-30 largest in the world.”

Vodafone is one of the largest Telco’s in the world, dwarfing Telstra.
“Vodafone Group plc is a British multinational telecommunications company headquartered in London and with its registered office in Newbury, Berkshire. It is the world’s second-largest mobile telecommunications company measured by both subscribers and 2011 revenues (in each case behind China Mobile), and had 439 million subscribers as of December 2011”

“When Telstra does not spend money on infrastructure, it is criticized. When it does, it is criticized more.”

There are even calls in this reply thread for the same. “I’m not even going to get started on the topic of Telstra’s anticompetitive practices”. Yep – those bastards! They go out and actually do something off their own bat and they nastily don’t want to share the rewards with those that have done nothing but whinge. Sounds pretty much like the way the political narrative in general is running nowadays.

Exactly. Telstra have made a strategic decision to prioritise wireless coverage and speed. It’s clearly been a wise investment decision and any of the other carriers could have done the same. It’s Vodafone’s own fault they got into that mess (by *not* making the right strategic decisions), but somehow it’s Telstra who are killing them off??

That’s a tad simplistic Goresh – For one – Vodafone PLC is an investor in VHA. It is not the same company. SingTel is a public company – with significant investment from the Singapore Gov sovereign investment fund… Not dissimilar from Telstra – see Future Fund.

Telstra’s expertise is in milking the Australian market an incumbent – on the other hand SingTel has great expertise in emerging Asian markets (an area in which Telstra does not have stellar record ). In short why would they pour cash into the Australian market when they can fund investment in emerging markets where they may get a greater RoI?

When Telstra does not spend money on infrastructure, it is criticized. When it does, it is criticized more.

Perfectly consistent then.

There’s a basic presumption around here that the only acceptable infrastructure is government infrastructure. That’s always the answer you have to get to… but from time to time the question might change.

The basic presumption is that infrastructure competition in fixed networks (road / rail / electricity / water / communications) is ineffective and inefficient.
And the unsaid (most of the time) corollary that infrastructure competition in wireless networks is extremely effective and efficient.

Please don’t purposefully misunderstand the nuance because you disagree with one part of the above.

I think if Vodafone wanted to be a serious player in the Australian market they could probably compete head to head with Telstra with infrastructure investment. As a Telstra mobile customer their investment in the best infrastructure vindicates why I pay $80/month. It’s not cheap but a big and fast network is why I pay the price.

It’s got a lot to do with Telstra’s fixed line network as well. The backhaul from that helps fuel the 3G/4G network. Voda just doesn’t have that kind of infrastructure everywhere. Optus has a fair deal.

This goes back to the next stage of an NBN rollout. In my opinion NBN should also control the wireless infrastructure. We are too small and wide spread as a country to have everyone putting up their own infrastructure. Telstra is loaded with cash to spend and since wireless is the only place they can get a competitive advantage, they are building it up in an attempt to retain their telecoms customer base.

One of our current problems is we have a situation where changing providers often means getting a new handset due to the variation in spectrum used by each provider. I want to be able to buy one handset and use it until either the device dies or a new technology emerges that makes it worthwhile to upgrade.

There is also a huge waste in the number of wireless towers being deployed just to support the main providers. Have a single infrastructure and build it so there is enough support for the number of users in each location.

The funny part about this… on the Brisbane to Gold Coast railway link of late, I have been testing Telstra, Optus and Voda at various times of day. I am starting to find while when you get close to the city Telstra and its LTE coverage prevails, overall having some kind of connectivity Vodafone is surprisingly winning. Telstra has lots of black spots, and takes a good 5~ minutes to start getting traffic flow again after a drop.

Note – I was previously a long term Voda user, jumped to Telstra 2-3yrs ago. Using Optus/Voda on Prepaid for testing.

I am concerned about the degradation of existing Telstra 3G services. It appears that to achieve the upgrades to 4G, Telstra are reducing 3G services, i.e. to fit new 4G transmitter equipment in towers they are removing some of the 3G transmitters.
Many people are compaining about lack of Telstra 3G data connectivity in capital cities in various forums (including this one), and from experience I can say that 3G data services in Adelaide are often unusable at peak periods of the day.

I’m sorry Renai, but in what world is increased private sector infrastructure spending anticompetitive in circumstances where there are two rivals also making the investment?

And in what world would the ACCC “step in” to stop Telstra investing? That’s just ludicrous. Australians are getting three competing 4G networks at no cost to the taxpayer and you want the ACCC to intervene? I have never heard a more ridiculous argument in the telecommunications debate.

Do you actually understand competition policy or economics? Serious question.

“Vodafone PLC is an investor in VHA. It is not the same company. ”
It is a 50% shareholder.

“SingTel is a public company – with significant investment from the Singapore Gov sovereign investment fund”
Temasek Holdings is the majority shareholder. When the government was the majority shareholder of Telstra, it was considered a government enterprise.

The Aus government transferred it’s total shareholding to the Future Fund when it was set up, 17% of the total. The Future Fund has been selling down it’s Telstra shares and diversifying ever since.

Telstra Voda and Optus all went into the GSM market at about the same time, there really was no incumbent. Optus enjoyed favourable access to the AMPS network until it was shut down. There was really very little opportunity for leverage.

“Temasek Holdings is the majority shareholder. When the government was the majority shareholder of Telstra, it was considered a government enterprise.”
@54% ownership probably a fair call.

“The Aus government transferred it’s total shareholding to the Future Fund when it was set up, 17% of the total. The Future Fund has been selling down it’s Telstra shares and diversifying ever since.”
Not too sure what the point is here – I was simply saying that both Telstra and SingTel were former Government incumbent telcos now partly owned by sovereign investment funds.

I tend to agree with Renai in the advantage Telstra has is its ability to leverage funds resulting from its former incumbency i.e. copper network revenue stream, to fund build out of its mobile network.
It has a huge war chest it can use to smash competing builds and has a track record of doing just that – see ’90s HFC rollout.

To say that there was no incumbent mobile provider is again a simplification – A mobile network is fully integrated into the telco infrastructure. NextG build had a massive advantage in leveraging off Telstra’s backhaul network, and so did its LTE build (every base station required fibre Tx). Both networks required massive transmission upgrades compared to the preceding networks. This is where Telstra truly had advantage of incumbency – its fibre and exchange network dwarfs Optus. VHA still doesn’t really have one – it leases most of its capacity off various 3rd parties.

Right now Optus and VHA are in a joint venture to share base station infrastructure (sites and Tx rather than electronics) in an effort reach the match the scale Telstra already leverages in those areas. It’s not just about cash either – to upgrade existing fibre Tx (to go from 3G to LTE/4G is relatively easy for Telstra when it can use existing fibre in the ground it owns. The likes of Optus and VHA have to actually lay the fibre in the ground in some cases (especially the more regional base stations) which takes significant time.

well you know what be funnier is if telstra started rolling out LTE-ADV on a new frequency that they just got and the next gen samsung note 3 and/or a samsung galaxy s5 to go along and no iphone you would have 1 of 2 things happen more complaints by both voda/optus/apple fanboys or apple and optus/voda try to compete but remember telstra has done exclusive products like this before e.g. samsungs galaxy s2 4g gt-9210t exclusively to telstra

Telstra is, wait for it,competing. Great. We want competition. Without it, huge infrastructure owners (like Telstra, but not excluded to) become lazy and simply milk the market for as much profit as is attainable.

Unlike the fixed network (where Telstra’s footprint and ownership is arguably a wholly different story) it’s pretty much open season for mobile operators.

Good on em. We need Telstra to do more. And Optus. And Voda. Spices the market up and ensures competition keeps a lid on prices; and, more importantly, provides a degree of choice (yes I realise that’s still a bit of an illusion) to the market.

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